SEC Filings

MEDTRONIC PLC filed this Form DEFR14A on 10/11/2017
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Performance Highlights


Medtronic is the global leader in medical technology – alleviating pain, restoring health, and extending life for millions of people around the world. Fiscal year 2017 was a solid year for Medtronic. The company delivered record revenue, made progress in each of its growth strategies, executed on its Covidien cost synergy commitments, generated strong free cash flow growth, and deployed its capital in line with its stated priorities, balancing the return of cash to our shareholders with disciplined reinvestment in its businesses.


During fiscal year 2017, Medtronic delivered record revenue of $29.7 billion, growing approximately 5 percent1, in the mid-single digits for the fifth consecutive year. The company made progress in each of its growth strategies. In Therapy Innovation, the company executed a steady cadence of meaningful product launches, as well as introduced some groundbreaking new technologies. In Globalization, the company expanded access to its therapies in emerging markets around the world, resulting in double-digit revenue growth1. In Economic Value, the company continued to extend its industry leadership in developing value-based healthcare solutions.


The integration of Covidien progressed as planned, and Medtronic has now realized over $600 million in synergy savings since the acquisition, and it remains on track to deliver its goal of $850 million of total cost savings by the end of fiscal year 2018. This operational productivity, coupled with Medtronic’s solid revenue growth, were key contributors to delivering double-digit diluted non-GAAP earnings per share growth1 and generating $5.6 billion in free cash flow2.


Medtronic strategically deployed its capital, meeting its commitment of returning 50 percent of its free cash flow to its shareholders in the form of dividends and net share repurchases. In addition, the company invested approximately $1.5 billion in several strategic investments and five tuck-in acquisitions, and these acquisitions are expected to further enhance Medtronic’s revenue growth and improve returns over time. Late in fiscal year 2017, the company announced the sale of a portion of its Patient Monitoring and Recovery division to Cardinal Health for $6.1 billion as part of its disciplined portfolio management strategy. The transaction closed early in Medtronic’s second quarter of fiscal year 2018.


Medtronic continues to create distinct competitive advantages and capitalize on the long-term trends in healthcare: namely, the desire to improve clinical outcomes; the growing demand for expanded access to care; and the optimization of cost and efficiency within healthcare systems. These trends, along with an aging population in most countries, produce secular growth tailwinds that Medtronic believes represent sustainable, long-term opportunities for the company. The company has a number of growth catalysts and is optimistic about its ability to deliver on its commitments and expand patient access to its products and services around the world.


Most importantly, in its fiscal year 2017, Medtronic served 70 million patients – more patients, in more places around the world, than in any year in its history. Two patients are benefitting from Medtronic therapies and services every second. This is a direct result of the dedication and passion of over 91,000 employees, collaborating with the company’s partners in healthcare, to fulfill the Medtronic Mission.


A few of our more notable fiscal year 2017 performance highlights include the following:


Achieved revenue of $29.7 billion and non-GAAP earnings of $6.4 billion.


  Grew revenue by approximately 5%.1
  Delivered solid operating margin improvement of approximately 100 basis points.1
  Grew non-GAAP diluted earnings per share by approximately 11-12%.1


Generated $6.9 billion cash flow from operations and $5.6 billion of free cash flow.2
Returned $5.5 billion to shareholders in the form of dividends and net share repurchases. Increased its cash dividend by 13 percent, the 39th consecutive year of increasing its dividend payment.
Delivered solid, balanced geographic revenue growth, with low-single digit growth1 in the United States, mid-single digit growth1 in Non-U.S. Developed Markets, and double-digit growth1 in Emerging Markets.
The Cardiac & Vascular Group (CVG) grew revenues in the mid-single digits1, as the group continued to leverage its breadth of products and services, as well as its strong positions in important, rapidly expanding markets to drive sustainable growth. Combined, its products in transcatheter aortic valve replacement, insertable diagnostics, AF ablation, left-ventricular assist devices, and drug-coated balloons are now annualizing at nearly $3 billion and growing over 20 percent.1
The Minimally Invasive Therapies Group (MITG) grew revenues in the mid-single digits1 and continued to benefit from five key growth drivers: Open-to-Minimally Invasive Surgery, or MIS, End Stage Renal Disease, Respiratory Compromise, Lung Cancer, and Gastrointestinal Disease. The group launched new products in Advanced Energy and Advanced Stapling, including new LigaSure™ instruments and Signia™, its new, single-handed powered surgical stapler that provides surgeons with real-time feedback during surgery.


1 Revenue growth, diluted earnings per share growth, and operating margin improvement are provided on a constant currency, constant week basis, or on a constant currency basis and are considered “non-GAAP” financial measures under applicable SEC rules and regulations. Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are included in Appendix A of this proxy statement.
2 Free cash flow is operating cash flow minus capital expenditures, and is considered a “non-GAAP” financial measure under applicable SEC rules and regulations. Reconciliations of this non-GAAP financial measure to the most directly comparable GAAP financial measures are included in Appendix A of this proxy statement.


MEDTRONIC PLC   2017 Proxy Statement    8